In this paper we study the hold-up problem by considering the effect of union bargaining power on the level of investment per worker across sectors characterised by different levels of sunk capital investment. We develop a search and matching model with heterogeneous sectors and ex-post collective wage bargaining and test the predictions of the model using a difference-in-difference approach on manufacturing sector data in a set of OECD countries during the period 1980-2000. We find that union power reduces investment per worker particularly in sunk capital intensive industries. We refine our empirical analysis showing that the underlying hold-up problem is exacerbated when strikes are not regulated after a collective contract is signed and there is no arbitration, while the presence of social pacts may sustain cooperative equilibria that alleviate the hold-up problem. Our results are robust to a series of controls and possible endogeneity of union power

We study the effects of managerial practices in schools on student outcomes. We measure managerial practices using the World Management Survey, a methodology that enables us to construct robust measures of management quality comparable across countries. We find substantial heterogeneity in managerial practices across six industrialized countries, with more centralized systems (Italy and Germany) lagging behind the more autonomous ones (Canada, Sweden, the UK, the US). For Italy, we are able to match organizational practices at the school level with student outcomes in a math standardized test. We find that managerial practices are positively related to student outcomes. The estimates imply that if Italy had the same managerial practices as the UK (the best performer), it would close the gap in the math OECD-PISA test with respect to the OECD average. We argue that our results are robust to selection issues and show that they are confirmed by a set of IV estimates and by a large number of robustness checks. Overall, our results suggest that policies directed at improving student cognitive achievements should take into account principals selection and training in terms of managerial capabilities.

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